City fears new listing rules

GOVERNMENT proposals to place the UK Listing Authority (UKLA) under the control of the Financial Reporting Council (FRC) rather than the Consumer Protection and Markets Authority (CMPA) are causing concern in the City, with some warning that the new system will make London less competitive.

The London Stock Exchange (LSE) is believed to be lobbying for a change to the proposals, published at the end of July as part of the Treasury’s consultation for a new regulatory structure for the City.

The LSE has already published a briefing note, seen by City A.M., which makes the case for the UKLA to be part of the CPMA.

Among the concerns outlined is a fear that the FRC will be unable to influence the newly created European Securities and Markets Authority (ESMA). Each European member state is allocated a single seat on the regulatory body, which will have responsibility for regulating listed markets across the EU.

There are also fears that putting the UKLA into the FRC will create conflicting rules for primary and secondary markets.

One City insider suggested the proposals would lead to a more complex regulatory structure than the existing one potentially damaging London’s competitiveness as a financial capital.

James Palmer, head of global corporate markets at Herbert Smith, said the proposals were creating widespread concern. “While we see some areas of connection between the FRC and UKLA, the overwhelmingly stronger connections are between the UKLA and its role as primary market regulator and the CPMA,” he said.